[REVIEW] [GF: Phase 1, Voting Cycle 7] Overtime Markets

how would you describe “inviting environment” ? As a user what would i need to do to be part of this incentives ? How will the distribution plan look like ? You mention fee rebates, in current state how does this look like. could you please paint a picture for us.

By offering Fee Rebates to users, the user/trader would feel more comfortable trading on Overtime knowing that he will get OP+THALES rewards proportional to the amount of fees they generated. This is especially beneficial for growth of the project and for UX for end traders as it will create a lucrative environment for Sports Positioning compared to centralized competitors, especially as Overtime already offers the best rates in the industry. We are highly optimistic that this specific initiative will prove to be the most impactful one, especially as organically the Fee Rebate emissions should be on the low side compared to other incentive structures such as LP mining.

30% as targeted events…
Similarly here, you have a space of 30K which is pretty big. How would you do this and where ?

Targeted Events allocation is basically focused incentives (trading competitions, per-game incentives, incentives specific for certain tournament brackets) for exclusive sporting events and new offerings that are the most popular globally. These focused campaigns tend to be a major tool in bringing new attention to the product as this industry is mostly event driven.

Project with match co-incentives with THALES tokens to a certain degree that will be determined by the governance structure.
when can we expect more info on this ?

Co-incentives are solidified during the detailed planning of emissions during the internal governance sessions as to find a best possible matching balance for that specific period in time. So far, the Thales governance structure matched all incentives almost equally.

2 Likes

We belive Overtime (sports betting) can be one of the early killer apps for Optimism as this areas is not strongly held back by current blockchain limitations and can attract many users with specific events. Consequently, the Fifa Worldcup could be a great occassion to bring in additional users to OT & OP.

It seems you never had unincentivized usage.

  • Do you think the fee rebates are essential? How did you come up with the expectation of 20 to 40% increase in user numbers based on fee rebates?
  • If pricing & fees are already better than on centralized platforms and aren’t holding back adoption, 100% focus on user experience and marketing towards user acquisition would be better usage of funds, right? (currently happy users might not need a fee rebate aka unnecesary cost for the Optimism ecosystem and it could be spent on growth instead)

For new products, we’d prefer to see unincentivized, organic usage for some time. Otherwise, it’s really hard to tell whether pricing is (un)attractive to users or if there are other issues to adoption.

Generally, our experience with prediction markets and providing capital in such pools has been that liquidity is a major barrier and it’s tough to find (opposite) parties for certain markets (especially with little trading fees in early stage). Is this an area that holds you back or is it a non-issue for Overtime/Thales? (Hence, there is no focus on this matter in the proposal)

We see that Overtime and Thales are different products & proposals target different areas. Nonetheless, in our opinion it would be best for the Op ecosystem to issue grants for specific goals within the next 6 months (incl. builder initiatives) and have ecosystem teams “spend these tokens” on sustainable growth initiatives (or give them back?) instead of “sitting on tokens” for future usage.

Obviously, this also depends on the demand side and we don’t want to encourage a rapid spending of tokens for uncertain initiatives… but potentially Overtime could use more of these Thales OP tokens to grow adoption… and Thales + Overtime can request more tokens in the future.

Looking forward to your replies!

  • Do you think the fee rebates are essential? How did you come up with the expectation of 20 to 40% increase in user numbers based on fee rebates?

We determined that the fee rebates seem to be the most effective low-cost growth tool. They are low emissions compared to straight volume incentives and are more inviting towards organic usage, instead of drawing in farmers only. As sports positioning industry is a constant competition around who will provide the best odds, giving a fee rebate rewards to users gives Overtime an edge using tokenization against limited centralized solutions. This brings more eyes to Overtime and provides a solid stream of new organic growth since farmers cannot take advantage of a fee rebate system without taking on positioning risk.

  • If pricing & fees are already better than on centralized platforms and aren’t holding back adoption, 100% focus on user experience and marketing towards user acquisition would be better usage of funds, right? (currently happy users might not need a fee rebate aka unnecesary cost for the Optimism ecosystem and it could be spent on growth instead)

Overtime does provide highly competitive sports positioning terms compared to centralized solutions and is constantly working on iteratively improving UX and constant new exposure campaigns. Having 70% of this OP grant proposal planned towards long-term fee rebate program fits into UX and marketing tool at the same time. It solidifies Overtimes edge in the industry regarding user experience, and it gives further incentives for non-crypto people to make an effort towards learning about onboarding the Optimism network, using EVM compatible wallet and educating themselves around Web3 for a clear benefit. These are not trivial efforts for non-crypto people but are necessary for increase in adoption of Optimism and Overtime with it. We would not call fee rebates unnecessary cost as it represents one of the most effective and non-toxic growth incentives.

Generally, our experience with prediction markets and providing capital in such pools has been that liquidity is a major barrier and it’s tough to find (opposite) parties for certain markets (especially with little trading fees in early stage). Is this an area that holds you back or is it a non-issue for Overtime/Thales? (Hence, there is no focus on this matter in the proposal)

We are using an elegant novel AMM contract that seeds liquidity to sports markets based on Chainlink provided pre-game odds. Every created game market is a separate contract that is seeded with on-demand liquidity by a global SportsAMM contract and we think this liquidity model is a worlds first working model for these type of markets. Liquidity of games is not an issue requiring incentives as it is currently 100% seeded from the treasury that takes on the risk until we develop a external LP system with revenue share. Keep in mind the novel AMM is super capital efficient and it does not require massive collateral for high demand. To learn more about it, visit this link: Sports AMM - Overtime Documentation

We see that Overtime and Thales are different products & proposals target different areas. Nonetheless, in our opinion it would be best for the Op ecosystem to issue grants for specific goals within the next 6 months (incl. builder initiatives) and have ecosystem teams “spend these tokens” on sustainable growth initiatives (or give them back?) instead of “sitting on tokens” for future usage.

Fee Rebates incentives would be committed until they are depleted and are not possible to have a fixed timed emissions. Fee Rebate emissions are proportional the usage of Overtime. Bucket of 30% towards targeted campaigns are also impossible to time right now since it requires to be highly adaptable to upcoming major events in the world of Sports.

2 Likes

Recommendation from DeFi committee C

Value-Add
Overtime Market is a unique product implemented on the Optimism chain. Launched 2 months ago and achieved some traction already - partially due to incentives from Thales incl. OP. The proposal can help Overtime & Optimism gain users.

Traction
Until now, Overtime Market has been performing well in attracting early power users & almost 1K total users.

Metrics achieved in 65 days since launch on Optimism:

  • 943 unique traders
  • 8,609 total trades
  • above 200 txns per day
  • 15 supported sports leagues and rising
  • $1,041,389 Settled Volume
  • $2.1M Notional Volume
  • above 60 Unique Daily Users on average incl. daily new users

Amount
The requested amount is 300K $OP tokens, which is a reasonable figure. But given that the Overtime team is partly the same Thales team that already received a grant of 900k $OP tokens in phase 0, the requested amount is high.

Thales Phase 0: https://gov.optimism.io/t/gf-phase-0-proposal-thales/1078"

OP Distribution
Distribution of up to 50K for World Cup incentives, rest of targeted events & fee rebates depends on market demand (might last longer than aspired 6 months)

  • 70% as incentives in form of Fee Rebates to create an inviting environment to help with the Overtime growth and user increase.
  • 30% as targeted events to help user growth of new league and sport integrations.

Co-incentives
The co-incentives will be determined by governance, which is the same as Thales’ governance ( https://docs.overtimemarkets.xyz/decentralized-sports-markets/governance). And if implemented, it will be with the Thales token.

Alignment
As an Optimism native platform. there is no doubt that the Thales team is aligned with the Optimism ecosystem,

Recommendation
NO

Overtime Market is a good product that is getting decent early traction - with OP/Thales incentives. Looking at the analytics & current fee rebates, the fee rebates would largely accrue to current top users and would likely last a lot longer than 6 months. At the same time, the Thales team still has almost 100% of funds for ecosystem projects, and we believe this would justify reducing the fee rebate program & total grant amount at least 1/3. This recommendation should not hinder on-boarding during the world cup as max 50K of OP were suggested and we’d recommend re-submission for the next cycle

Our past recommendation is available on committee recommendation thread.

1 Like

Hey Red from Thales/Overtime here.

I just want to point out how fee rebates are of catalytic importance for our users.

At the moment, Overtime odds competes with major centralized bookies, although it doesn’t always have the edge. Fee rebates, allows us to not only compete, but take the lead on offering the best odds in the industry. This is a major point to attract users from web2 to web3. Without a solid offering there’s not many reasons for them to make the move. This is why offering the best odds is of importance.

The table below compares the odds of 2 major centralized bookies and Overtime with rebates and different sizes.

As incentives rolls out we are working on new solutions to bring the price impact of buyers down.

The first solution which will be implemented in the next few days starts with offering a price impact discount to position where the AMM is heavily involved. You can further ready about the TIP here : Thales: Permissionless Parimutuel markets.

The second solution is to increase the AMM liquidity. Overtime is currently a new product and opening the AMM to the public would be reckless. As we move out of “Beta” and further work on the kinks of the AMM to be as efficient as possible we will make the move. At the moment we are working on this for the CryptoAMM. Opening the AMM for deposits will allow to increase the liquidity per market hence decreasing the price impact of big volume buys.

As you can see we have plans to bring the best prices to our users, and we are grateful for the opportunity to obtain 300,000 $OP tokens to help us incentivizes this growth plan. Truth is that without these incentives we would lose our immediate edge and therefore wouldn’t be as attractive as one can be. This means less users for Overtime and Optimism.

7 Likes

The defi shadow committee which is not an official committeesupports this proposal .

We support the proposal and respect their path to growth on Optimism. The dual-pronged approach of fee rebates and direct marketing campaigns are likely highly catalytic for user growth on Optimism — and this would be a different user segment than typical market-dependent defi users and crypto speculators.

Overtime Markets has a unique value proposition for Optimism and stands apart from crypto-native DeFi protocols. With these fee rebates, we believe they ought be able to better compete with centralized offerings and continue the growth they’ve seen over the last 2 months since launch. We thank @Red for following up on our inquiries into this question and think Overtime have made a strong case.

We think there is an information gap that Overtime could meet by reporting more of their expected go-to-market strategy, but now is the time to give them an opportunity to jump ahead of the pack.

7 Likes

Couldn’t agree more. This is a great proposal from Overtime and I’m excited to see it pass. I invite other committees to reconsider their recommendations with this new information.

Thanks @Red and @jackanorak

3 Likes

Great update Red; The Synthetix Ambassadors also support this proposal.

Bringing Sports Markets on-chain and making it unique to Optimism is a huge win.

Voting yes can help them flourish on the Optimism ecosystem, and bring new users to the ecosystem.

2 Likes

There are three reasons cited here for the “no” recommendation:

  • the fee rebates would largely accrue to current top users
  • they would likely last a lot longer than 6 months
  • the Thales team still has almost 100% of funds for ecosystem projects

Were these flagged as potential deal breaking details by committee members prior in the two weeks prior? Or are they being raised here for the first time?

the fee rebates would largely accrue to current top users

That argument would make much more sense for a pro rata volume driven incentives, but fee rebates are fee rebates - every trader gets those. Its actually the only distribution mechanism that is impossible to be sybiled or drained by whales.

they would likely last a lot longer than 6 months

I guess this assumption is made by taking into account the historical volume for a protocol that is released two months ago and was in beta with relatively low liquidity caps. We have huge plans for the next month, including releasing Parlays and opening up the Sports AMM to anyone to provide liquidity on the sports they choose, which is likely to 10x the volume and also increase the TVL on Optimism. We hoped these plans would be backed by this grant for max impact.

the Thales team still has almost 100% of funds for ecosystem projects

Idk what this is trying to say, but if its about the Phase0 grant, well Thales distributed almost 50% of it, and in that process it achieved an amazing increase in volume and unique users for the Crypto AMM product, while ensuring the rewards go to the hands of organic users (not sybilers, farmers, etc). I fully believe that Thales is one of the firsts, if not the first protocol that has actually used the majority of Phase0 grant for what it was actually intended, while keeping Optimism’s best interest in mind, instead of hording the tokens in treasury, self-delegating those in governance, paying grants to its developers, or whatever other governance mockery we’ve seen other projects pull to date.

Also, to reiterate a fact said many times: Overtime did not exist during Phase0 allocation.

In general, I do feel like pointing out that this recommendation goes against the sentiment of the Optimism’s community, which was demonstrated both here and in discord’s temp check. And it does so for some wrong assumptions, which makes me wonder if the said DeFi committee has tried the product, watched it grow, or understands the potential of the 50 billion dollars industry we are tapping into here. Ultimately, if this committe does not see the value in supporting Overtime as an Optimism native project, well thats a clear signal by itself.

4 Likes

Pretty baffled by the committee’s recommendation and honestly think this spurs an important conversation around improving Optimism’s governance system.

The summary so far is that a popular Optimism-native protocol - with a unique usecase on the network, that’s already working well and has strong community support - gets turned down based on criticisms and “data” pulled from god knows where that simply doesn’t hold true.

Moreover, all questions and concerns have been answered well by the Thales team IMO.

I don’t understand the reasoning at play in this committee’s recommendation and hope to see them change their view. In any case, I look forward to the committee’s response to @OPGovWatch’s question and the Thales team’s commentaries.

3 Likes

Their recommendation on Overnight was similarly baffling.

They rejected all four proposals this cycle whereas Committee A recommended “yes” for 3/4, but only with a few sentences for each. This doesn’t look good at all.

Overtime Markets is an outstanding project with a terrific, supportive team. As an early adopter and daily user of both Optimism and Overtime Markets, I ask that you further synergize to help you both grow and thrive!

I’m very optimistic you’ll see what I see in Overtime (and Thales)!

TheWiseBull.eth

2 Likes

refers to this,with respect to the allocation of phase 0

We at ScaleWeb3 would like to share a bit more insight to our (personal) reasoning:

Unfortunately, there was little time for feedback and discussion of this proposal as our committee took it over on a short notice. That said, I, Julian, personally looked into this proposal probably longer than into any other on this forum as we saw great value but were keen to understand the details.

First of, all committee members shared that they appreciate the Thales team‘s contributions, and have acknowledged the value proposition of Overtime and value-add of the current proposal on multiple occasions. (In fact, a committee member is satisfied enough to vote Yes. Prob you‘ll hear that reasoning as well soon.)

Let‘s dive in to the content and why we‘d recommend a slight adjustment of the proposal before resubmission in the next cycle in 2 weeks:

  • Fee rebates: We see why they are needed, that they are hard to game and yet we are a bit worried that they may largely accrue to the current powerusers. Consequently, we are supportive of fee rebates but want to see their impact and how well they do in ONBOARDING NEW USERS FOR A CERTAIN PERIOD as that is the suggested KPI that would add tremendous value to Optimism (See first rewards on Overtime)
  • Co-incentives: This was not detailed enough in our opinion as it completely depends on your governance. From a young project, we don‘t expect huge monetary co-incentives but certainty on incentives, potentially a pre-approval from your community to match x% (or not), would help the evaluation of the proposal.
  • Go-to-market & Onboarding of users from Web 2: The comparison to centralized platforms is great, onboarding of Web 2 users is needed for real, sustainable growth but also a long shot at this early stage. In a comment above you mention web 2 users will learn about web 3 & EVM compatible wallets due to fee rebates (-> better rates on Overtime). If these users are indeed your target audience, you have to do a lot of education, wallet onboarding sessions and much more (also good use of grant money) - we lack a bit of fantasy to see the impact on non-existing crypto user onboarding. Besides that, we initially thought the event focus would include all kinds of online marketing campaigns (also good use of grant funding) but we ultimately came to understand that you want to rather focus on some monetary incentives for markets & competitions. Overall, each of these initiatives is good use of grant funding (and we don’t want to judge the merits of the different initiatives) but there was some detail missing to get a clear picture for the use of funds & onboarding.
  • Traction & Amount Asked: 60 active daily users & almost 950+ unique users are a great achievement for a new Op native project. It‘s important to note though that this behavior has been incentivized with OP and THALES tokens with a loss coverage program & fee rebate program. 300K Op is a significant amount for a project that’s less than 2 months live (!), especially with somewhat unclear co-incentives, distribution, runway.
  • Distribution: We strongly believe in running short incentive programs (up to 6 months) to learn, improve, potentially create another co-growth proposal. (We mentioned that Thales still has unspent tokens for ecosystem projects as we expect them to be spent & to help other delegates understand the full picture, that there are additional funds that could be utilised before offering a second grant - Yes, we know those are different grants, products & it’s totally fair to ask for a new grant!) besides that, Overtime mentioned some incentives would be committed until they are depleted and it was not possible to have a fixed timed emissions. (Totally true for gas tanks & fee reductions based on usage - potentially should be refillable IF campaign is successful?!) Hence, we looked at your current emission schedule or bi-weekly 8000 OP incentives → 100.000+ OP would allow you to run this experiment for 6 months - which is plenty of time to make learnings and draw conclusions to propose even better co-growth initiatives.

@danthales @Red thanks for your response and for the additional data. I can only repeat that we all are supportive of Overtime, genuinely liked the proposal and this was a close call where we were also torn between YES & NO. We understand all delegates who are already satisfied and vote YES. However, we recommend NO as we believe reducing the remaining uncertainties, getting buy-in from your community, and slightly adjusting the Ask will make the proposal better, help with future accountability (+ avoid setting a bad precedent), and resubmitting in 2 weeks (!) is the best way to go.

Good luck with the vote! :slightly_smiling_face:

1 Like

Hi @danthales and @Red , thank you for providing additional data. Will try to summarize my side on few question raised here as well as on discord.

You are correct, we looked into data and saw that rebates are aligned toward power users and consensus was that we should also focus on on-boarding new users.

On ecosystem fund, I think you are talking about something else because as per author’s comment, 90K $OP allocated for ecosystem project is sitting in the treasury.

We obviously dont want to spend the token furiously but our goal was to understand why its not being used to give a jump start to a new solution developed by the team. This was asked twice but we did not get an answer.

I understand that Overtime did not exist during Phase 0 and when reviewing this proposal we considered Overtime as an independent solution and that is why we are not talking about complete Phase 0 proposal. This is how I see it, an innovative protocol build by team with dedicated fund set aside for ecosystem growth.

Third point was co-incentives. Co-incentives are proposal and protocol specific and I tried to get my doubt clarified, twice.

After not getting a clear answer on the forum, I reached out to the author via DM to collect more information so that we can make an informed decision.

removing text as team might not want to make the detail public. summary is that information was provided on 30% allocation but co-incentives were still not clear

I see some people think I am against the protocol and attacking me. What I would like to insist is that, we are mixing the credibility of protocol with the recommendation of this proposal, we spent significant time reviewing this proposal and looked at it from all angle, one reason for publishing recommendation at the last was because I was waiting for additional information to my DM.

I believe that all proposal should get a fair review and chance to participate in this gov and we should welcome them to Optimism ecosystem through this governance funding. Apart from spending significant amount of time on the forum, usually I reach out to proposal’s author via DM and on discord to understand their side and to collect more information with a goal that final decision is not made in a hurry or on the basis on half-knowledge. Help me understand, what else I should have done from my side.

Like Julian from @ScaleWeb3 has mentioned, we are all supportive of Overtime and believe that its goals are aligned with Optimism and echo his view on resubmitting proposal in 2 weeks than rushing things and setting bad precedence.

1 Like

On DM-s I just gave an example (still non-public unannounced FIFA World Cup promotion) on how the 30% allocation towards Event Driven promotions would look like to support our claims of it being a powerful tool in this type of industry.

The other point of DM is reassuring that any OP token emissions are matched with THALES tokens, but that it is better to not throw numbers before it’s time, because it is impossible to find a perfect balance of co-matching before it’s time to deploy the programs. Co-incentive numbers we say now may not be in balance when the time comes to deploy the said programs, and this claim is in benefit to the guidelines of co-matching and should not be seen as uncertainty. I am kind off confused how you folks managed to see it under that lens.

The 90k OP allocation is reserved as grants for third party builders on top of Thales Protocol, and that is how it is cemented ever since Phase 0 allocation. We take our commitments to Optimism Governance seriously and would feel like doing bad by the community of builders and evading Phase 0 promises by using these 90,000 OP tokens towards a product that is not built by Third Party Community builders but by the core team. Again, confuses me that this also is taken as a flaw in our commitments instead of a positive precedent.

Hope this gives more context to both @OPUser and @ScaleWeb3 messages above.

2 Likes

Thales has matched all OP incentives to date with 1 to 1 THALES incentives in dollar value at the time. Given that’s more than 400k OP tokens distributed already, we likely felt there is some empiric trust already established, as we are known good actors within this ecosystem, and that we dont have to throw in specific numbers as we already said we will be co-incentivizing.

But as that seems very important to committee members, I am happy to commit that we are to match all Overtime OP incentives with equal dollar value of THALES tokens taking a 7 days twap dollar value.

2 Likes

Respectfully, this proposal was not taken on short notice. This was one of the one of three proposals originally assigned to the committee.

The other two (Curve and Homora) both made last minute changes, had delegates remove their support, and withdrew. This was technically the only proposal the committee was obligated to review.

Keeping our recommendations brief is intentional. The purpose of committees was to limit the workload on other delegates. As a delegate myself, I don’t find posts that repeat the components of a proposal helpful. We keep our recommendations short and concise in order to limit the burden of information overload on fellow delegates.

1 Like